Monday, January 3, 2011

Happy New Year!

The market is lifting the ball nicely today for a possible short. Patience pays indeed!

Even if the market is ripe for a correction, I will refrain from selling for two reasons:

> The total put/call ratio:

I have previously seen the market top with the ratio spiking like this but I like to fade bullish spikes especially when I go against the trend.

> The bullish outlooks for the economy have reached everyone's ears by now and I think the majority of market players expect a positive surprise from the NFP number on Friday. This means they will buy or postpone selling until then.

These reasons in the context of a strong uptrend make me stay on the sidelines for now. For those that choose to sell, a rally into ES 1264 on the ISM number looks tempting.

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